Tuesday, May 20, 2014

State Laws Which Inform the Consumer of Health Care Prices and Quality

Does Your State Help or Hinder Your Access to Quality Health Care?

This article reviews state health care laws impacting clinical care and resourcing in light of the Accountable Care Act and the needs for primary health care. The recent articles in the academic Health Affairs Journal and by the nonprofit advocacy group, The Commonwealth Fund, address the issue of market competition in health care delivery and the impact on services as well as the potential for anti-trust issues. Anti-trust occurs when a single health care entity or a consortium of providers exerts enough control of the market in a given geographic region, to dictate prices, and to be able to perform in an atmosphere where the consumers have fewer choices. In other words, to charge more without offering an improvement in service. Now, with that in mind, some of the state laws that throw a monkey wrench into this idea of a competitive marketplace for health care are; certificate of need requirements, any-willing-provider regulations, and scope of practice limitations. One example of a legislative limitation on the regulation of health care services, as reported in the state-wide surveys in Unraveling U.S. Health Care-A Personal Guide[1], several states outlaw the practice of naturopathy, which limits the number of clinicians for primary health care. There are also administrative limitations which states use to restrict access for clinical training, such as limiting the funding to university programs for nurse practitioners, thereby restricting the number of clinicians available in the health care system. From an economic standpoint this keeps the compensation high for the practitioners, but results in a dearth of clinicians in an area of great societal need.

As Martin Gaynor points out in Health Affairs’ May 2, 2014 publication, Competition Policy, and Markets: Navigating the Enforcement and Policy Maze, health care delivery, inclusive of insurance and health care services is governed by many different and oft times conflicting entities, from federal to state and local governments.[2]This mishmash of regulation does not result in more effective or less expensive health care.

The Patient Protection and Affordable Care Act created the Accountable Care Act mandates for health care organizations, which pays for clinical performance for treatment of targeted diseases. Now that the ACA has been implemented by many health care systems, financial rewards have been paid, and two years of data is available, there has been sufficient time for states to evaluate and modify their health care sector regulations. One of the consequences of the ACA has been the merger of many hospitals, which has reduced competition and services in some areas. In Washington State, as I have previously written, Providence Health Care acquired Swedish Hospital Group and Peace Health controls many of the markets in smaller cities throughout the state. Though consolidation may benefit these health care behemoths, it does not necessarily improve or reduce the cost of health care for the consumer.

In order to have an effective market place, one must have a willing buyer and a willing seller, in pure economic terms. Health care, because it is so heavily regulated is not a typical consumer good, however, because most of the health care systems in the United States are not government owned, we do essentially have a privatized system of health care delivery, albeit one which is heavily subsidized by government payments.

Though price transparency is one of the key aspects of an effective consumer market place from which to buy goods and services, it is not optimal unless you also have the quality of the services also disclosed. Medicare has tracked health care outcomes for years and there is information available by procedure for price and quality on its web site. In January 2014, I presented a consumer tutorial on this tool in my Phinney Community Center presentation. It was obvious from that presentation, that consumers still find the availability of health care quality information difficult to understand and access. If we are going to persist in offering a private sector market place for the purchase of health services, we must demand that price and quality information be available. Clinical outcomes, such as hospital readmission rates, infections, and surgical errors, are examples of health care quality measures. Though aggregated information is available on this data, few states have taken the time to match patient outcomes with pricing. As detailed in chapter seven, Patient Safety-Who Reports Medical Errors, in my 2013 book, Unraveling U.S. Health Care-A Personal Guide[3], Minnesota has a state web site that allows anyone to view each hospital’s medical errors in the state.

As revealed in the National Conference of State Legislatures’ April 2014article, Transparency and Disclosure of Health Costs and Provider Payments: State Actions, Minnesota is also the state which has created a commission to link health care quality and pricing information in a consumer friendly model, to enhance the effectiveness of its health care market place.[4]This level of transparency is the gold standard and is something consumer driven health care advocates should demand.

Nevada also has an interesting law which mandates health care providers must charge everyone the same price for the same service, in other words they can’t charge higher prices to the uninsured or for those on different health plans. This too, is an interesting approach to a market place correction, because if all prices for the services are set and transparent, then the health care providers must compete on quality, which is really, the most important aspect of health care.It will be interesting to see how this plays out in Nevada.

And of course, Maryland has had a mandate for level pricing for hospital services on the books for thirty years, and it has been effective in keeping health care costs down, as reported in my December 2013 article on hospital price transparency.

Stay tuned for more information on initiatives to improve consumer information on health care quality and price thus enabling individuals to make informed health care decisions. And this is the healthpolicymaven signing off, encouraging you to share this article with anyone who may benefit.